Grain represented one-third of Seaway traffic in 2020. Ottawa—While rising grain shipments were a boon to the St. Lawrence Seaway during 2020 and the first half of 2021, their decline this fall and next year because of drought in Canada and the U.S. will dampen the waterway's short-term traffic prospects.An analysis of the Seaway's 2020 results by the Chamber of Marine Commerce (CMC) showed that efforts by shipper and shipping groups in both countries kept the waterway operating through the pandemic.While the Great-Lakes Seaway total tonnage dropped by 12.1 per cent last year, with U.S. cargoes hit hardest, “Grain was a particular bright spot for Canadian-flag vessels. As households hunkered down and increased their consumption of food, the demand for Canadian grain rose to the most robust it has been in over half a decade.”While the drought provides a complication for this year, “Some analysts believe the Canadian grain trade is likely to continue to trend upward in the medium term, as yields increase and new markets are being developed,” CMC said. Grain shipments in 2020 were 13.0 per cent higher than the previous 5-year average.“Nevertheless, some cautious optimism should be applied in this analysis, as grain has proven to be one of the most volatile commodity lines. Over the past 5 years, grain shipments on Canadian-flag vessels have increased and decreased every other year.”The Port of Thunder Bay says it is receiving lower grain shipments because of the reduced Prairie harvest. “Monthly grain loads were down 30 per cent in September. This mirrors estimates by crop analysts of a 30 per cent reduction in crop yield this season. Year-to-date grain shipments are now 5 per cent below average.”A large proportion of the decrease in tonnage moved by Canadian-flag vessels in 2020 was due to a 6.6 per cent drop in demand for petroleum products.U.S.-flag vessels suffered a 22.2 per cent decline in total cargo shipments during 2020 with only grain and cement showing gains. Grain shipments represented 35 per cent of the total Seaway's 2020 tonnage.“As we move towards greener solutions for economic activity, the demand for petroleum products is likely to continue trending downwards in the long run,” CMC said. “The introduction of the work-from-home era has many organizations questioning the viability of everyday commuting as we've known it. Employers are now more willing to create hybrid solutions for employees, which requires minimal physical attendance in offices.“Ultimately, the near term and medium-term outlook for most commodities is highly dependent on the path of the virus and how soon we can resume some semblance of normal economic activity. Undoubtedly, COVID has catalyzed the process of digitization and decarbonization, which could have implications on the long-term outlook of various commodity markets.